IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v22y2013i1p157-178.html
   My bibliography  Save this article

Firm and sectoral heterogeneity in markup variability

Author

Listed:
  • Saara Tamminen
  • Han-Hsin Chang

Abstract

Many theoretical models assume that the markup of price over marginal costs is the same for all firms in a sector, irrespective of firm size, type, or efficiency. We analyze the distribution of markups for 70 Finnish sectors using a complete dataset, including both manufacturing and services sectors and firms of all sizes. In contrast to the constant markup hypothesis, we find (i) large differences in markups within sectors, (ii) higher markups for small firms and domestic firms, and (iii) greater markup heterogeneity in sectors with low capital-labour ratios and a large number of firms.

Suggested Citation

  • Saara Tamminen & Han-Hsin Chang, 2013. "Firm and sectoral heterogeneity in markup variability," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 157-178, February.
    • Handle: RePEc:taf:jitecd:v:22:y:2013:i:1:p:157-178
    DOI: 10.1080/09638199.2013.745289
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638199.2013.745289
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638199.2013.745289?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Tamminen, Saara & Chang, Han-Hsin, 2012. "Company heterogeneity and mark-up variability," Working Papers 32, VATT Institute for Economic Research.
    2. Martin, Stephen, 2001. "Industrial Organization: A European Perspective," OUP Catalogue, Oxford University Press, number 9780198297284.
    3. John Sutton, 2001. "Technology and Market Structure: Theory and History," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262692643, April.
    4. Joachim Wagner, 2016. "International Trade and Firm Performance: A Survey of Empirical Studies since 2006," World Scientific Book Chapters, in: Microeconometrics of International Trade, chapter 2, pages 43-87, World Scientific Publishing Co. Pte. Ltd..
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tamminen, Saara, 2014. "Varying markups and income inequality in an open economy," Conference papers 332437, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    3. Peter A.G. van Bergeijk & Charles van Marrewijk, 2013. "Heterogeneity and development: An agenda," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(1), pages 1-10, February.
    4. Saara Tamminen, 2017. "Regional effects or none? Firms' profitability during the Great Recession in Finland," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 33-59, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tamminen, Saara & Chang, Han-Hsin, 2012. "Company heterogeneity and mark-up variability," Working Papers 32, VATT Institute for Economic Research.
    2. Livat, Florine & Remaud, Hervé, 2016. "Factors Impacting Wine Price Mark-Ups in Restaurants," Working Papers 234639, American Association of Wine Economists.
    3. Nina Ponikvar & Maks Tajnikar, 2011. "Are the Determinants of Markup Size Industry-Specific? The Case of Slovenian Manufacturing Firms," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 58(2), pages 229-244, June.
    4. Joachim Wagner, 2012. "Exports, R&D and productivity: a test of the Bustos-model with German enterprise data," Economics Bulletin, AccessEcon, vol. 32(3), pages 1942-1948.
    5. Geoffrey Barrows & Hélène Ollivier & Ariell Reshef, 2023. "Production Function Estimation with Multi-Destination Firms," CESifo Working Paper Series 10716, CESifo.
    6. MORIKAWA Masayuki, 2015. "Service Trade and Productivity: Firm-level evidence from Japan," Discussion papers 15030, Research Institute of Economy, Trade and Industry (RIETI).
    7. Carsten Eckel & Florian Unger, 2023. "Credit Constraints, Endogenous Innovations, And Price Setting In International Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(4), pages 1715-1747, November.
    8. Garcia-Gallego, Aurora & Georgantzis, Nikolaos & Gil-Molto, Maria Jose & Orts, Vicente, 2006. "Game-theoretic aspects of international mergers: Theory and case studies," International Review of Law and Economics, Elsevier, vol. 26(3), pages 395-409, September.
    9. SHIMAMOTO Daichi & Yu Ri KIM & TODO Yasuyuki, 2019. "The Effect of Social Interactions on Exporting Activities: Evidence from Micro, Small, and Medium-Sized Enterprises in rural Vietnam," Discussion papers 19020, Research Institute of Economy, Trade and Industry (RIETI).
    10. Arvanitis, Spyros & Hollenstein, Heinz & Stucki, Tobias, 2016. "Does the explanatory power of the OLI approach differ among sectors and business functions? Evidence from firm-level data," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 10, pages 1-46.
    11. Bertschek, Irene & Kesler, Reinhold, 2022. "Let the user speak: Is feedback on Facebook a source of firms’ innovation?," Information Economics and Policy, Elsevier, vol. 60(C).
    12. Umut Kılınç, 2018. "Assessing Productivity Gains from International Trade in a Small Open Economy," Open Economies Review, Springer, vol. 29(5), pages 953-980, November.
    13. Joachim Wagner, 2017. "Intra-good trade in Germany: a first look at the evidence," Applied Economics, Taylor & Francis Journals, vol. 49(57), pages 5753-5761, December.
    14. Armando Silva & Oscar Afonso & Ana Africano, 2013. "Economic performance and international trade engagement: the case of Portuguese manufacturing firms," International Economics and Economic Policy, Springer, vol. 10(4), pages 521-547, December.
    15. Eva Hagsten & Patricia Kotnik, 2017. "ICT as facilitator of internationalisation in small- and medium-sized firms," Small Business Economics, Springer, vol. 48(2), pages 431-446, February.
    16. Saara Tamminen, 2017. "Regional effects or none? Firms' profitability during the Great Recession in Finland," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 33-59, March.
    17. Lo Turco, Alessia & Maggioni, Daniela, 2013. "Does Trade Foster Employment Growth in Emerging Markets? Evidence from Turkey," World Development, Elsevier, vol. 52(C), pages 1-18.
    18. Sarbu Miruna, 2017. "Does Social Media Increase Labour Productivity?," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 237(2), pages 81-113, April.
    19. Joakim Gullstrand & Karin Olofsdotter & Susanna Thede, 2016. "Importers, Exporters and Multinationals: Exploring the Hierarchy of International Linkages," Open Economies Review, Springer, vol. 27(3), pages 495-514, July.
    20. repec:grz:wpaper:2012-09 is not listed on IDEAS
    21. Afonso, Oscar & Silva, Armando, 2012. "Non-scale endogenous growth effects of subsidies for exporters," Economic Modelling, Elsevier, vol. 29(4), pages 1248-1257.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:22:y:2013:i:1:p:157-178. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.